Government stuck spending £1bn on consultants as IT skills falter, say MPs

The government is spending £1 billion a year on consultants, including for IT, while it struggles to develop its own skills.

That is the verdict of MPs on the Public Accounts Committee, who said that for as long as the government does not develop proper in house capabilities it will be stuck with a vast consultancy bill.

The PAC said it recognised there were "legitimate reasons" to buy in specific skills where departments did not have them. But in a damning report it said it was "concerned that some departments have failed to grow the skills that they require".

IT was one of the most problematic areas, it said. In the report, 'Central government's use of consultants and interims', it said it was "most concerned" that the proportion of spending on IT and management consultants had risen from 50 percent in 2009 to 60 percent this year.

Much of the money spent was wasted, it said, as departments failed to define what they wanted from contractors and failed to negotiate successfully. Departments regularly paid by the hour rather than linking rates to outcomes delivered.

Spending on consultancy overall, however, had fallen 46 percent this year as the government stopped large programmes. But the PAC said it was "concerned that this 'stop-go' approach to using consultants is not sustainable and does not deliver value for money".

The organisation spending the highest proportion on consultants was the Department for Transport, which spent £70 on consultants for every £100 it spent on staff. The lowest was HM Revenue and Customs, where the figure was £2 for every £100.

The PAC said the Cabinet Office "has not done enough" to improve the government's core skills base, in spite of "repeated recommendations" in PAC reports over the last eight years.

Copyright © 2010 IDG Communications, Inc.

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